Linc sinks as it raises $200m

Shares in
Linc Energy
have fallen more than 12 per cent after the company announced it had raised $200 million through a convertible bond issue.

Linc plans to use the proceeds to pay down existing debt and to strengthen its balance sheet.

"The bonds will support and de-risk the commercialisation of the company's key assets and provide working capital for at least the next three years," Linc said in a statement.

The bonds convert at $3.40 a share – a premium of 27.5 per cent to the closing share price on Tuesday.

Shares fall

The company's shares fell 12 per cent to $2.30 on Thursday morning after coming out of a trading halt.

Chief executive
Peter Bond
said the extra funding gave the company the flexibility to speed up the development of its energy portfolio.

"It allows us the option to minimise third party equity in our existing projects such as Umiat or sub salt drilling in Texas, or to increase our equity participation in various joint ventures," Mr Bond said.

Related Quotes

Company Profile

He said the bonds would provide low-cost funding, which minimises the dilution for existing shareholders.

Next stage

Linc said the bond issue would take it to the next stage of operational and financial maturity.

Despite the share price fall, the company's shares have more than tripled in value over the past four months following a series of strong drilling results and speculation that Russian billionaire
Roman Abramovich
is interested in Linc's oil reserves.

Since November 29 last year, shares in the company have increased from 69.5 cents to $2.30 on Tuesday.

Linc owns traditional oil and gas assets in the US and Australia, and also has separate clean energy and coal divisions with interests in China, Russia, Poland and the Ukraine.